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Reminder - Equity Short Sale Validations

August 17, 2018

FINRA reminds clients that effective Monday, August 20, 2018, validations will be applied to the OTC Trade Reporting Facility (ORF) and the Alternative Display Facility (ADF) for equity transactions submitted with the Short Sale Indicator.

A Short Sale Indicator may be submitted only on trades that meet the following conditions:

on sell side trades to indicate if the executing party is selling short;

on buy side trades in which the executing party is buying from a customer (non-FINRA member) who is selling short; or

on a buy side trade in which the executing party is buying from a contra member firm that is selling short on locked-in or non-locked-in trades that are Tape Only (stated in the report as Publish Indicator = Y and Clearing = N) or Non-tape and Non-clearing.

If a transaction is submitted with the short sale indicator and at least one of these conditions is not met, the transaction will be rejected.

Note: The Short Sale Indicator supports the Short Sale and Short Sale Exempt values. Please refer to the Trade Reporting FAQs for further guidance on Short Sale reporting.